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Aussie telcos push for severe restructure of ACMA

Optus wants regulator replaced, Telstra lobbies for deregulation.

Australia's telcos have put forward their proposals for the future of communications regulator ACMA, with the country's two largest carriers recommending the regulator be severely wound back or scrapped altogether.

In June the government announced it would conduct a root and branch review of the ACMA to determine whether the regulator was fit for purpose in a "rapidly changing" sector.

The ACMA was established in 2005 and regulates broadcasting, telecommunications and radiocommunications in Australia.

The Communications department today published submissions to the review, revealing the country's telcos are pushing for a fundamental restructure of the ACMA or its disbandment altogether.

No more ACMA?

According to Australia's second largest carrier Optus, the ACMA should be dumped in favour of a new independent regulatory body that would take over the regulator's functions as well as the telecommunications-specific activities of the ACCC.

It said the current regulatory structure - where an industry-specific regulator (ACMA) co-exists with a nationwide competition regulator (ACCC) - had led to inconsistent decision-making, misalignment of priorities and objectives, overlap and duplication of activities, and lack of flexibility to respond to rapidly changing market developments.

Optus argued [pdf] there was therefore a "strong case" to restructure the current arrangement along the lines of UK communications regulator Ofcom.

This converged regulator would also have responsibility for telecommunications, broadcasting and radio communications regulation, but Optus warned such a move should not be seen as a platform for a more "hands-on and intrusive regulator".

"Quite the contrary, it should set a platform for more proportionate, targeted and more effective regulation. There should be a presumption against regulation unless this can be justified to deliver a net public benefit."

Telstra pushes for deregulation

According to the country's largest telco Telstra, however, more power for regulation should be handed back to the industry to allow it to be more flexible to change.

ACMA should therefore be wound down and limited to simply registering industry codes and being responsible for their enforcement.

"The current regime falls short of best practice and can be improved by making greater use of coregulation and self-regulation options," Telstra argued [pdf].

"In co-regulation the regulator still has a role (typically enforcing the requirements) while in self-regulation the requirements are either voluntary or subject to consequences under an industry compliance framework.

"Compared to “black-letter” regulatory solutions administered by regulators, Telstra considers these options can often solve problems and deliver policy outcomes more efficiently as well as making the regulation more flexible and fit-for-purpose."

Telstra admitted some "black-letter" regulation would still be required, but ACMA and other regulators should only become involved when there is evidence of "systemic breakdown or failures that are not being adequately addressed and fixed by industry".

"As a general principle, industry should be given every opportunity to develop and implement practical solutions within a co-regulation or self-regulation framework," Telstra said.

Current ACMA functions that should be handed over to industry include numbering, customer protection, technical standards, the Integrated Public Number Database and Do Not Call Register requirements, and spam and cyber security requirements, among others, Telstra said.

"It would continue to have a substantial role in specific areas, such as managing radiocommunications licensing, but in other areas it would either have no role or be limited to approving industry codes and assisting industry to enforce compliance with codes," Telstra said.

Given industry would be handling much more regulatory activity itself, Telstra said, it would be "reasonable" that the government hand over any savings achieved through the slimming of ACMA to the industry.

Similarly, the government should undertake a review of current telecommunications black-letter regulation to determine if any areas could be better served through industry self-regulation, Telstra said.

Forced consideration of competition

Rival telco Vodafone steered clear of recommending an entire replacement of the ACMA, but said the regulator should be made responsible for the competition effects of its decisions.

It argued [pdf] the ACMA had suffered from an ill-defined mandate since its inception, contributing to diverse responsibilities and overlap with other entities - and resulting in inconsistent and ill-assessed decision making.

Because the ACMA does not have responsibility for competition issues associated with telecommunications and broadcasting, Vodafone said, there had been times when the regulator had avoided dealing with competition matters in its decision making.

"There have certainly been instances in which the ACMA’s unwillingness to engage with the competition impacts of their decision making has resulted in poor outcomes in the relevant markets," Vodafone wrote.

It cited the ACMA's recent determination of competition limits for the upcoming auction of regional 1800MHz spectrum as an example of the regulator avoiding competition concerns.

"This results in Optus, VHA and any other potential bidder being capped at 2x25MHz of spectrum while Telstra is allowed to take up to 2x40MHz – 60 percent more spectrum than any other bidder can achieve."

Vodafone said the ACMA should either be made to promote competition in its decision-making; take over control for implementing competition principles from the ACCC, which would set the principles; or be made responsible for all competition matters.

ACMA claims ongoing improvements

For its part, ACMA said [pdf] over the past decade, it had made ongoing improvements in terms of its effectiveness.

Three ANAO performance audits had found the agency sound, ACMA said, and it had generated revenue despite receiving declining government funding over the past ten years.

The Commonwealth Ombudsman [pdf] also gave ACMA a clean bill of health, noting the number of complaints about ACMA was relatively small, with an average of 40 per year over the past decade.

It said it had never found any systemic or significant issues of concern with ACMA in any of its investigations.

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